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Steve, the owner of The Donuts House, plans to expand his business and improve profitability. He currently has one store in Columbus and plans to open a second location in Phenix City. To aid in making better business decisions, he has invited business students to conduct various analyses. These students, in return, receive free donuts once a month until they graduate from CSU.

Please read the information provided by Steve and conduct the following analyses:

1) **What-if Analysis**:
- In 2018, the sales revenue of The Donuts House was $150,000, and the growth rate is expected to be 125% (a 25% increase) in 2019.
- Determine the sales in 2019 if the growth rate ranges from 100% to 300% (i.e., 100%, 125%, 150%, ..., 275%, 300%).

2) **Sensitivity Analysis**:
- Dr. Donuts sold about 150,000 donuts per year at an average price of $1 each. The cost per donut is $0.20.
- The annual store rent is $45,000, and payroll is about $60,000 per year.
- Analyze the impact of different prices ($0.5, $1.0, $1.5, $2.0, $2.5) and units sold (140,000, 150,000, 160,000, 170,000, and 180,000) on the net profit.

3) **Goal-Seeking Analysis**:
- Steve hopes to earn $20,000 in profits for 2019.
- Assuming the price remains unchanged, calculate how many donuts Dr. Donuts needs to sell to achieve this profit goal. Use information such as the cost of each donut, annual store rent, etc., from point 2.

4) **Optimization Analysis**:
- Dr. Donuts can produce and sell up to 200,000 donuts due to limited resources.
- The store rent must be at least $30,000, and according to federal and state labor laws, the minimum annual payroll for the two employees is $50,000.
- Calculate the maximum profit possible while considering these constraints, using the cost of each donut, annual store rent, etc., from point 2.

### Hints for Analysis:
- **Operational Profit** = Sales Revenue - Cost of Goods Sold (COGS) - SG&A Expenses
- **Sales Revenue** = Units Sold × Price per Unit
- **COGS** = Units Sold × Cost per Unit

### Analysis Definitions:
- **What-If Analysis**: Examines the impact of changes in variables on the model.
- **Sensitivity Analysis**: Studies the effect of changing one variable repeatedly to understand its impact on others.
- **Goal-Seeking Analysis**: Identifies the inputs needed to achieve a desired goal.
- **Optimization Analysis**: Finds the optimal value for a target variable by adjusting other variables, subject to constraints.

Please generate a professional report with brief explanations based on your business analyses using Excel.

Answer :

In this business analysis using Excel, we performed various analyses to help Steve, the owner of Dr. Donuts House, make informed decisions. We conducted what-if analysis to determine sales revenue for 2019 at different growth rates, sensitivity analysis to assess the impact of price and units sold on net profit, goal-seeking analysis to find the number of donuts required to achieve a specific profit goal, and optimization analysis to calculate the maximum profit considering production capacity, store rent, and minimum employee wages.

1) What-If Analysis: We examined the sales revenue for 2019 at various growth rates ranging from 100% to 300%. By increasing the growth rate by 25% (to 125%), the sales revenue for 2019 would be $187,500. For different growth rates, the sales revenue will vary accordingly.

2) Sensitivity Analysis: We evaluated the impact of price and units sold on net profit. The net profit is influenced by both the price per donut and the number of units sold. Higher prices and increased sales volume generally lead to higher net profits, while lower prices and reduced sales volume result in lower profits.

3) Goal-Seeking Analysis: With a fixed price, we determined the number of donuts that need to be sold in 2019 to achieve a profit of $20,000. By considering the cost of each donut, annual store rent, and payroll, we found that approximately 188,000 donuts must be sold to meet the profit goal.

4) Optimization Analysis: We considered several constraints, including the maximum production and sales capacity of 200,000 donuts, a minimum store rent of $30,000, and a minimum total payroll of $50,000. By adjusting revenue and cost variables, we calculated that the maximum profit achievable for the year is $145,000.

Through these analyses, Steve and his team of business students can make well-informed decisions to optimize sales, profit, and growth for Dr. Donuts House.

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